Barrack, Rodos & Bacine (BR&B) Announces that It Is Investigating F45 Training Holdings Inc. ("F45") (NYSE: FXLV) for Potential Violations of Federal Securities Laws

Rhea-AI Summary

F45 Training Holdings has faced significant challenges post-IPO, with a drastic cut in financial guidance from $255-$275 million to $120-$130 million. The company plans to open only 350-450 studios instead of the promised 1,000, and a $250 million credit line will not be available. Additionally, F45 announced layoffs of about 110 employees and the resignation of CEO Adam Gilchrist. Following these disclosures, the stock saw a plunge of over 60%, currently trading around $2.00, marking an over 80% decline from its IPO price.

Positive

• None.

Negative

• Significant reduction in financial guidance, from $255-$275 million to $120-$130 million.
• Plan to open 60% fewer studios than previously promised, reducing from 1,000 to 350-450.
• $250 million credit line will not be available.
• Layoffs of approximately 110 employees.
• Resignation of CEO Adam Gilchrist, with substantial compensation upon departure.
• Stock price plummeted over 60%, currently around $2.00, an 80% decline from IPO price.

PHILADELPHIA, PA / ACCESSWIRE / August 15, 2022 / F45 Training Holdings Inc., a Mark Wahlberg-backed fitness franchisor based in Texas, went public in July 2021, when it sold 18.75 million shares priced at $16 per share. Until recently, the company reported results and issued guidance that was generally expected by the market.

However, on July 26, 2022, just a year after the IPO, F45 issued a press release in which it disclosed: (1) a reduction in its financial guidance, from a range of $255 to $275 million to a new range of $120 to $130 million; (2) for the year it would open about 60% fewer exercise studios than promised just two months earlier (or 350 to 450 of them, versus 1,000); (3) a $250 million credit line "will not be available"; (4) the company was letting go of about 110 employees; and (5) the CEO, Adam Gilchrist, had resigned the previous month. The announcement was made after Wahlberg had sold significant amounts of his own stock in the company. CEO Gilchrist received payments valued at over ten million dollars on his departure.

The disclosures in the press release sent the price of F45 shares down over 60% on June 27, 2022, and the stock is now trading at about $2.00 per share - over an 80% fall from its IPO price.

If you are an F45 shareholder and have suffered losses in your investment in F45, you are encouraged to contact Mark Stein, Director of Investigations at Barrack, Rodos & Bacine, at the toll-free number 877-386-3304, or via email at mstein@barrack.com, to learn more about the firm's investigation and your legal rights and options.

Philadelphia-based Barrack, Rodos & Bacine has more than four decades of experience prosecuting securities law class actions, including cases involving accounting fraud and insider trading, and has achieved some of the largest recoveries in the history of securities litigation in the U.S. The firm's largest recoveries on behalf of investors include $6.19 billion for WorldCom investors, $3.32 billion for Cendant investors, $1.05 billion for McKesson investors, and $970.5 million for AIG investors.

SOURCE: Barrack, Rodos & Bacine

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FAQ

What financial guidance did F45 Training Holdings revise?

F45 revised its financial guidance from a range of $255-$275 million to $120-$130 million.

How many studios will F45 Training Holdings open?

F45 will open about 350-450 studios, which is 60% fewer than the previously promised 1,000.

What happened to F45's $250 million credit line?

The $250 million credit line that F45 expected will not be available.

What layoffs did F45 Training Holdings announce?

F45 announced layoffs of about 110 employees.

What impact did the recent press release have on F45's stock price?

Following the press release, F45's stock price dropped over 60%, now trading around $2.00.